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WWRC 85-17(n)
Wyoming Oil and Water


The 1973 Arab oil embargo created a shortage of petroleum products and started a rapid escalation in crude oil and other energy mineral prices (coal, natural gas, uranium). The combination of fear of fuel shortages leading to rationing and never ending price increases forced the nation to seek out alternative energy sources, primarily the oil shale of Colorado, Utah and Wyoming and the coal reserves of Wyoming, Montana and North Dakota, both with the common purpose of being converted into liquid or gaseous fuels. All of the coal conversion processes would have consumed large amounts of water and created predictable fear of shortages of available water in Wyoming, shortages which threatened the traditional users of Wyoming surface and subsurface water, namely agriculture, recreation, wildlife and municipalities. This scenario was reported in some detail in a Wyoming Heritage Foundation report entitled "Water Development, A policy Analysis", published in January, 1985.

This earlier report demonstrated how a changing world oil and gas supply situation had depressed the price of crude oil and had rendered uneconomic all of the coal gasification and liquefication plants that were projected in the mid-1970's. The report also challenged the need to develop expensive new industrial water supplies in Wyoming, particularly in view of projected declining revenues as a result of lower oil prices; and abundant supplies of water already in storage.

The purpose of this paper is to elaborate on the world energy picture and its impact on the Wyoming economy, environment and population trends and the additional impact on revenues available to various levels of government. A reassessment of traditional and historical water policies in Wyoming is also addressed.

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